Dear Friends,
Did the Authorities have Ample Warning to Regulate the Sub-Prime Housing Mortgage Industry?
Here is a good interview by Bloomberg with 77 year old billionaire, Herbert Sandler, former CEO of Golden West Financial. With 40 years' mortgage experience, Herbert Sandler explained that he had written letters to Federal Reserve Chairman, Ben Bernanke, telling him of the "completely unregulated" firms that were doing the Sub-Prime Business, which ultimately triggered the current collapse in the housing market in the US today.
Mr. Sandler is upset that Ben Bernanke completely ignored his effort to prompt the Fed to take action back then.
From the information I have heard so far, it would seem that the authorities have been at fault on two counts, i.e. not regulating the Sub-Prime Business, and the banks who were operating at leverage of around 35 times to 1.
Why? Was it Ignorance, Negligence or ..........? You form your own opinion on the situation. If these two faults are true, then it is possible that Mr. Bernanke may not be around for long, once Obama wins the election.
If there is a vacancy to be the Most Powerful Man in the Financial World, who can fit the shoes?
In my opinion, the possible candidates for a new Federal Reserve Chairman are Bond King, Bill Gross and Professor Larry Summers. I believe Bill Gross has a lot of support on Wall Street, while Larry Summers is already the economic adviser to Mr. Obama.
Bill Gross had been voted one of the ten most influential man in the financial world by Fortune Magazine. It is interesting to note that in an interview with the media, Professor Roubini , also known as Dr. Doom, named Larry Summers as the man for the job.
Will Main Street or Wall Street win this potential vacancy?
Why is this important? Because the Federal Reserve Chairman is THE MOST POWERFUL MAN in the financial world. With a single slip of tongue, he can cause the world markets to collapse 10%. More importantly, a lot of promises (bailouts, rescue plans, economic stimulus packages, etc.) have been made by the Bush Administration, but they have not been carried out.
How many of these Bush Administration plans / promises will be implemented to completion, once Obama takes over, is any one's guess.
What's the difference in policy? Economic Management is about finding the money for the Government to spend. In listening to the McCain and Obama speeches, it has been claimed that Obama thinks that Bush has spent too much, and thus, he is intending to scrutinize the Government Budget with a fine toothcomb, to find the money to reallocate to the right areas, i.e. help the public in financial trouble today.
On the other hand, McCain has criticized Bush as not taxing certain people enough, and thus, he plans to raise taxes on those earning US$250,000 per annum and above. He does not seem to feel that there is anything wrong with the current Government expenditure.
Personally, I can't understand how the US Government can spend a hundreds of billions of US dollars every year, and yet, there are US Schools that are struggling to be properly equipped. Thus, I am of the opinion that Mr.Obama can do a lot, provided he is not worried about offending a lot of influential business people. When you cut down on a significant Government Budget Allocation, you DO OFFEND some influential business people in the process. Time will tell whether he can do it.
Is there a Price to the Presidential Campaign Donation?
I do not know how the real world works in the US, but in some Asian countries, a Presidential Election Campaign Donation of US$700 million is bound to require a lot of favors to be done in the next 4 years. When it comes to a Government,, any Government, favors mean allocation of projects, i.e. SPEND MONEY. So, I am very curious as to how Mr. Obama intends to deliver the goods, and cut down expenditure, or IF he has to deliver the goods at all.
Will it be a reduced Government Expenditure or the same total Government Budget Expenditure, merely reallocated, or will the actual Government Expenditure actually increase?
Lesson from President George Bush's Tenure
President Bush promised to reduce the Budget Deficit. But during his 8 years tenure, the US Government Debt rose from US$5.7 trillion to US$10.5 trillion. You can check how much debt is being accumulated every second by the US Government on my blog's National Debt Clock.
Will Obama increase this debt by another US$3 trillion in his tenure as President? Which President of the United States will do the right thing and work on reducing this debt? HOW?
Best wishes,
Ooi
Did the Authorities have Ample Warning to Regulate the Sub-Prime Housing Mortgage Industry?
Here is a good interview by Bloomberg with 77 year old billionaire, Herbert Sandler, former CEO of Golden West Financial. With 40 years' mortgage experience, Herbert Sandler explained that he had written letters to Federal Reserve Chairman, Ben Bernanke, telling him of the "completely unregulated" firms that were doing the Sub-Prime Business, which ultimately triggered the current collapse in the housing market in the US today.
Mr. Sandler is upset that Ben Bernanke completely ignored his effort to prompt the Fed to take action back then.
From the information I have heard so far, it would seem that the authorities have been at fault on two counts, i.e. not regulating the Sub-Prime Business, and the banks who were operating at leverage of around 35 times to 1.
Why? Was it Ignorance, Negligence or ..........? You form your own opinion on the situation. If these two faults are true, then it is possible that Mr. Bernanke may not be around for long, once Obama wins the election.
If there is a vacancy to be the Most Powerful Man in the Financial World, who can fit the shoes?
In my opinion, the possible candidates for a new Federal Reserve Chairman are Bond King, Bill Gross and Professor Larry Summers. I believe Bill Gross has a lot of support on Wall Street, while Larry Summers is already the economic adviser to Mr. Obama.
Bill Gross had been voted one of the ten most influential man in the financial world by Fortune Magazine. It is interesting to note that in an interview with the media, Professor Roubini , also known as Dr. Doom, named Larry Summers as the man for the job.
Will Main Street or Wall Street win this potential vacancy?
Why is this important? Because the Federal Reserve Chairman is THE MOST POWERFUL MAN in the financial world. With a single slip of tongue, he can cause the world markets to collapse 10%. More importantly, a lot of promises (bailouts, rescue plans, economic stimulus packages, etc.) have been made by the Bush Administration, but they have not been carried out.
How many of these Bush Administration plans / promises will be implemented to completion, once Obama takes over, is any one's guess.
What's the difference in policy? Economic Management is about finding the money for the Government to spend. In listening to the McCain and Obama speeches, it has been claimed that Obama thinks that Bush has spent too much, and thus, he is intending to scrutinize the Government Budget with a fine toothcomb, to find the money to reallocate to the right areas, i.e. help the public in financial trouble today.
On the other hand, McCain has criticized Bush as not taxing certain people enough, and thus, he plans to raise taxes on those earning US$250,000 per annum and above. He does not seem to feel that there is anything wrong with the current Government expenditure.
Personally, I can't understand how the US Government can spend a hundreds of billions of US dollars every year, and yet, there are US Schools that are struggling to be properly equipped. Thus, I am of the opinion that Mr.Obama can do a lot, provided he is not worried about offending a lot of influential business people. When you cut down on a significant Government Budget Allocation, you DO OFFEND some influential business people in the process. Time will tell whether he can do it.
Is there a Price to the Presidential Campaign Donation?
I do not know how the real world works in the US, but in some Asian countries, a Presidential Election Campaign Donation of US$700 million is bound to require a lot of favors to be done in the next 4 years. When it comes to a Government,, any Government, favors mean allocation of projects, i.e. SPEND MONEY. So, I am very curious as to how Mr. Obama intends to deliver the goods, and cut down expenditure, or IF he has to deliver the goods at all.
Will it be a reduced Government Expenditure or the same total Government Budget Expenditure, merely reallocated, or will the actual Government Expenditure actually increase?
Lesson from President George Bush's Tenure
President Bush promised to reduce the Budget Deficit. But during his 8 years tenure, the US Government Debt rose from US$5.7 trillion to US$10.5 trillion. You can check how much debt is being accumulated every second by the US Government on my blog's National Debt Clock.
Will Obama increase this debt by another US$3 trillion in his tenure as President? Which President of the United States will do the right thing and work on reducing this debt? HOW?
Best wishes,
Ooi
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